"There is no greatness where simplicity, goodness and truth
are absent."
Leo Tolstoy

Sunday, March 05, 2017

The Rich Are Different From You And Me

The wealthy still call the shots. If you doubt that assertion, consider recent revelations about Fintrac. Alan Freeman writes:

Time and again, Fintrac and the Canadian government have been called out
by the Financial Action Task Force, an intergovernmental group that
develops international standards in the fight against money laundering,
for weak laws and half-hearted enforcement. Instead of being a leader,
Canada has earned a reputation as a laggard in this battle.

This lukewarm commitment by Ottawa to policing money-laundering wasn’t
helped by a Supreme Court of Canada ruling in 2015 that exempted lawyers
from mandatory reporting of suspicious transactions, accepting the view
that this would somehow violate solicitor-client privilege. Welcome,
kleptocrats. Canada is beckoning.

If you want to launder money, you need secrecy. And Fintrac can and does provide it:

In almost 10 years of existence, [Fintrac has] assessed financial penalties
only 95 times — mostly small fines aimed at currency dealers and
jewellers who haven’t kept proper records.

Then, last April, Fintrac finally landed a big fish.
For the first time, a bank had been caught breaking the rules by
failing to report a suspicious transaction and an undisclosed number of
money transfers. It was fined a record $1,154,670 — but Fintrac decided
to undermine its own action by using its discretion and refusing to name
the guilty party.

Again, it was the dogged work of journalists — at the Toronto Star, National Observer
and CBC — that identified Manulife Bank of Canada, a subsidiary of one
of our biggest life insurance companies, as the offending institution.
According to these reports, Manulife was guilty of five different
violations of the law, including failure to report a suspicious
transaction with a client who was a convicted felon and failure to
report 1,174 international wire transfers of $10,000 or more involving
other clients, as well as an overall lack of anti-money-laundering
policies.

The little guys haven't received that kind of treatment:

While Manulife could hide in obscurity, protected by Fintrac’s
discretion, dozens of tiny outfits have been named and shamed by the
same agency and have paid the price in lost reputation. “It’s very
unfair to name someone and not name someone else,” Michael Baumbach of
the Diamond Exchange told the Toronto Star after his business,
which has three employees, was named by Fintrac and fined $12,750 for
violations on the same day that Manulife was fined and got its omerta
protection. Why Fintrac has named 40 of its violators over the past
nine years while protecting the identities of the other 55 is anybody’s
guess.

There is a myth that F. Scott Fitzgerald once told Earnest Hemingway, "The rich are different from you and me." Hemingway responded, "Yes, they have more money." The incident never happened. But the point behind it is still true. The rich buy influence. And, thus, they have more power.

Personally, I see FINTRAC's timidity around the big financials as simply a reflection of Trudeau's pursuit of the same neoliberal policies so religiously embraced by the Harper government. It is becoming increasingly apparent that the new emperor has no clothes, Owen.

More and more Owen, these organizations like Fintrac, set up by the government to monitor any questionable money transactions, in this case money laundering, in fact ignore, or protect these companies. This also includes institutions like the CRA and the government itself. The bigger the company, the greater the discretion.

It's almost like intergovernmental groups like Fintrac & others are set up to give the impression to the Canadian public that the government is doing something about illegal financial violations, when in fact they are doing the minimum, while protecting companies like Manulife Bank of Canada from public exposure.

Trudeau governs for special interest groups,especially for the corporate elite. Canadians are of no interest, but can't be completely ignored, so when the government does deign to address them, they are lied to about what's really going on.

About Me

A retired English teacher, I now write about public policy and, occasionally, personal experience. I leave it to the reader to determine if I practice what I preached to my students for thirty-two years.